Washington – A federal battle pitting cable TV providers against phone companies is expected to affect Colorado consumers.
Congress is looking at several bills that would allow phone companies nationwide to offer video service. Cable companies have traditionally gone city by city to get cable-TV franchise approval.
The federal fight is shaping up to be just as acrimonious as last summer’s war in Austin, Texas.
In August, Texas became the first state to revamp its video franchising rules, lending support to efforts by AT&T Inc., then called SBC Communications, and Verizon Communications Inc. to invest across the state.
That law lets new providers apply for statewide franchises for video service. Virginia and Indiana have recently followed suit with their own versions.
In Colorado, a group of 32 Denver-area cities called the Greater Metro Telecommunications Consortium are close to approving a model franchise agreement. The new agreement would allow telephone company Qwest to offer TV service.
Philadelphia-based Comcast Corp., which has 700,000 customers here, has said that the agreement would allow Qwest to “cherry-pick” neighborhoods, offering service only in areas that are more financially advantageous to its bottom line, rather than across the metro area.
GMTC attorney Ken Fellman said recently that the coverage issue has been a sticking point in negotiations.
If a national cable franchise law were passed, local negotiations wouldn’t be necessary.
Nationally, most lawmakers agree they want to give consumers more pay-television service choices and get companies to install more broadband Internet lines.
“Texas is a great model,” said Dorothy Attwood, senior vice president of regulatory planning and policy for San Antonio-based AT&T. “It’s proven to be a bellwether for the kinds of reform that Congress is talking about now.”
Texas is also becoming a laboratory for the telephone companies as they compete with the cable industry to offer voice, data and television services. Verizon’s fiber-optic TV offering, FiOS, debuted in Keller in September and has taken 30 percent of the market. AT&T is rolling out its Project Lightspeed TV service in San Antonio this summer.
Cable companies say the phone giants don’t need help from lawmakers to get bigger. They’re lobbying to derail the process, raising many of the same charges that were fought over in Texas.
“This is clearly a sweetheart deal for an industry that doesn’t deserve a special break and a competitive advantage over anybody, let alone the cable industry,” said Kyle McSlarrow, president and chief executive of the National Cable and Telecommunications Association.
Several proposals under consideration in Washington would give cable companies more equal footing and could supersede the Texas legislation that was more favorable to the phone giants.
The phone industry’s success in Washington may prove even more difficult in an election year, despite the strong support of Rep. Joe Barton, R-Texas, who is leading House negotiations. Barton told a Consumer Electronics Association conference last week that members are close to a compromise. A draft of legislation is expected to be unveiled in the coming weeks.
Still, election-year politics may get in the way.
Lawmakers have been weighing several changes to the 1996 telecom act that sought to bring competition to the phone industry. But many want to avoid alienating voters with divisive issues before the fall elections, said Kevin Book, a senior policy analyst at investment bank Friedman Billings Ramsey.
